Business Model of CNN

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The American news-based subscription channel, CNN, was founded back in 1980 by American business and media tycoon, Ted Turner. The 24-hour cable news channel came into existence as a part of the Turner Broadcasting conglomerate. CNN (Cable News Network) was the first ever 24-hour television news channel in the United States. The online edition of CNN, cnn.com, was launched on 30 August 1995. The online edition definitely did not fail even a single chance to cause a spurt in the CNN ratings. People turn to CNN whether it is elections time or otherwise. As of January 2016, the audience watching CNN Politics was nearly 25 million. The business and revenue model of CNN has incorporated a pile of the international channels and an utterly huge assemblage of resources; has even managed to surpass its parent company in the revenue and profit statistics.

Let’s take a closer look at the details about the business and revenue model of CNN.

1. The Most Trusted Name In News

The Cable News Network (CNN) has managed to occupy the top label of being “the most trusted name in news.” CNN has often been credited as a top news network; increasing the commercial distance between itself and Fox News and MSNBC. CNN credits its success to passion, diligence, and unceasing hounding for the truth. Top-notch reporting is its forte. The network makes sure that each one of its employees is committed to breaking any sort of news to its viewers. The in-depth analysis of each report is what has made it a front-runner in the arena of news reporting.

2. Focus On Facts, Not Mere Rumours

The news broadcasting network believes in the philosophy that journalism does not only mean trafficking rumours or innuendo. They strive ahead to challenge the reality of rumours in the fast age of the internet. They just do not print stories or news simply because a rumour is out of control. CNN is well aware of the widespread and extensive implications of sprinting with any kind of rumour. They engage its viewers/readers with straightforward facts; putting up exactly the precise headlines without any kind of partiality or commentary. CNN ducks away from rendering misinformation to its viewers. In October 2018, it made it to the list of the top 25 traditional outlets supplying trustworthy information.

3. Want To Know More? Go to CNN!

CNN does not only target the niche audience wanting to know the breaking news or about political affairs but also various other unrelated domains. It regularly updates its audience about climate changes, science & technology, entrepreneurial or educational initiatives, international incidents, etc. CNN has always been a punctual fount of true and appropriate information. No matter what kind of information the audience hunts for, CNN never fails even a single chance to put forth relevant and accurate information. It spares no effort to always have a strategic focus on reports and articles.

4. Humans Effort Matter The Most

When the other news channels had other niches to concentrate on, CNN had a strategic focus on news only. By 1998, CBS, ABC, and NBC outsourced to CNN. The reason behind their success can be attributed to the fact that CNN is more focussed on storytelling in a more humanised way. The abovementioned fact has paved way for an increase in the number of shares per article and the number of visitors on its social media accounts. CNN tends to touch the strings of the hearts, and therefore, does not lag behind to present the news in a powerful and touching way. Emotional and humanised storytelling has been its modus operandi.

5. CNN Money Brand

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The Cable News Network launched a website catering to financial news and information in 2001. Renamed CNN Business in October 2018, CNN Money originated as a digital integration between CNN and Time Warner’s Time and Fortune business magazines. The synergies between the CNN website and the channel were definitely increased. Moreover, the weekly financial show “Your Money as CNNMoney” was rebranded as well. CNN Business has always been distinct on “digital transformation of business, and how it is disrupting every corner of the global economy.”

6. Global Diversification

Headquartered at Atlanta, Georgia, United States, it has planted its flags at Abu Dhabi, London, and Hong Kong as well. CNN has nine headquarters in its birth country. It has achieved the milestone of getting into nearly 100 million homes in the States only with as much as 200 million homes worldwide, excluding the United States only. Cultural agility and mobility apart from strategic talent management have paved a way for a conducive environment, at all its offices, for global workers.

7. A Propitious Traffic Rank

In June 2016, CNN Digital reached a turnaround of recording the highest number of multiplatform visitors outshining all its competitive channels and websites. CNN registered a total of whopping 116 million unique visitors leaving behind Yahoo News by 16 million views and BuzzFeed.com by 38 million. Keeping up with the fast-paced world, CNN continued to mark its success. In January 2018, it, yet again, recorded a hefty amount of 122 million unique multiplatform visitors. The supremacy of CNN in the digital world dwarfed Fox News by nearly 30 million visitors.

8. Careful Acquisitions and Investments

A comprehensive and selective approach in acquiring other companies and making investments is what has enabled CNN to occupy the digital zenith. CNN has very carefully acquired Zite, in August 2011, which is a mobile app providing favourite magazines, newspapers, videos, and blogs in a personalised format to the user. What’s more is the fact that the news network also got its hands on Beme, in November 2016, which is a video sharing platform and put forth a personalised experience for the user. Its conscientious investment in Pathfire, digital media distribution and management solutions, to deliver relevant content to its audience.

REVENUE MODEL OF CNN

As of 2009, the operating income of CNN was $500 million. The primary source of revenue for CNN is subscription fees. The revenue from subscription fees accounts for 50 per cent of its total revenue, whereas the other 50 per cent is held by advertising and ancillary revenue streams.

Most of the websites draw their revenue from primetime. The CNN US primetime alone accounts for nearly 10 per cent of the revenue. The feasibility, reach, and easy monetisation of the primetime make it the real estate of the digital world and the CNN swears by these factors.

Another important factor which helps in driving revenue of the CNN is the fee-for-carriage. The fee-for-carriage, also known as negotiation for value, value-for-signal, or the TV tax, is usually paid by the broadcasters to Distribution Platform Operators (DPO) for carrying channel(s).

Digital advertising and sales also account for nearly 10 per cent of the CNN revenue. Managing costs, continued investment in journalism, fees-for-carriage, and the extension of the multiplatform reach are the four pillars for growing news division and driving more revenue according to Phil Kent, former CEO of CNN.

Whatsoever be the case, the dual revenue stream cable business model alone is enough to generate good amounts of profit for CNN.